Here is the way it was supposed to work: Uncle Sam would borrow and spend trillions of dollars to save the economy and the financial system, but interest rates would stay near rock-bottom and nobody would worry about the potential side effects of all that spending -- like, say, inflation or a devalued dollar.

Things aren't proceeding quite according to plan. The investors who are supposed to buy all of that new Treasury debt are rebelling, driving interest rates up. That's exactly what the housing market doesn't need. The average 30-year mortgage rate rose to a six-month high of 5.29% this week from 4.91% the previous week, according to Freddie Mac.

And that was before Friday's big jump in Treasury bond yields, which are the benchmarks for many other interest rates, including home loan rates and municipal bond yields. The 10-year Treasury note yield rocketed to 3.86%, up from 3.71% on Thursday and the highest since November.

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But it's the trend that's important here, and the broader implications. Even as Federal Reserve Chairman Ben S. Bernanke was on Capitol Hill this week warning that the U.S. risks borrowing its way into yet another crisis, Treasury Secretary Timothy F. Geithner was in China trying to assure the largest foreign owner of Treasury bonds that its investment was safe. Yet with every tick higher in market yields, the value of China's $770 billion in Treasury holdings erodes.